Being two years 'out in front' not enough, says mayor

As Boulder looks for ways to cut its greenhouse gas emissions, some city leaders are looking to the building code for at least one of the answers.

Boulder's current building code was well ahead of national conservation standards back in 2006 when it was adopted. However, international building code standards have evolved since. The 2012 codes published by the International Energy Conservation Code and the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) bring the rest of the country up to Boulder's requirements.

The city is in the process of updating its energy code. The proposed changes, which will be presented to the Landmarks Board and Planning Board in April and the City Council in May, will require new construction to be roughly 20 percent more energy efficient than the current IECC and ASHRAE standards. That puts the city where the international code is expected to be in 2015.

Some City Council members think the city could do better and craft more aggressive requirements.

"We're a whole two years ahead of the rest of the country," Boulder Mayor Matt Appelbaum said. "That's hardly way out in front, and we've tried to be way out in front."

The energy code update is separate from the various energy efficiency incentives and requirements the city runs as part of its Climate Action Plan. However, city leaders see the code update as tied to the same goals of drastically reducing energy use. The city is working with a consultant to calculate how much greenhouse gas emission reductions can be achieved with various levels of increased energy efficiency.

The energy code update will apply to new construction, which makes up a very small part of the city's building stock, and to renovations that change a component of the building covered by the energy code or that represent a significant size increase.

Commercial buildings larger than 20,000 square feet need to do an energy performance modeling and meet a certain energy rating. In residential construction, larger homes will need to have better ratings than smaller homes, as they use proportionally more energy.

In a discussion at a City Council meeting this week, building officials told the council that requiring significantly higher energy efficiency now is likely to run up against federal requirements for appliance energy use. It's not clear, for example, whether the city could require that furnaces have fuel utilization rates of 90 percent, when the federal government only requires 80.

Appelbaum said the City Council is unlikely to hold up the energy code update this spring, but a larger discussion needs to be had, both about raising the standards and about how to change more of the existing building stock.

Boulder Chamber of Commerce Public Affairs Manager Angelique Espinoza said many businesses are interested in increased energy efficiency, but they need to do it in ways that make sense for them.

"For many businesses, energy is not a large enough component of their bottom line that it's worth it for a lot of businesses to pay higher rent for a lower utility bill," she said.

Some companies make being green part of their branding, but others need to focus more on a concrete return on investment, Espinoza said.

"Energy efficiency is a business no-brainer, but there are complications around who is going to pay the money and who is going to see the savings," Espinoza said, referring to the split incentive between tenants and landlords.

The city addressed that same split-incentive problem for residential landlords by simply mandating higher energy efficiency standards. Landlords have until 2018 to meet the new standards. They can increase their buildings' overall energy efficiency rating through a variety of means, and the city provides technical assistance and financial incentives.

Boulder has considered adopting similar requirements for commercial and industrial buildings, but serious discussion of that probably won't happen until 2014. That initiative is separate from the building code update.

The city recently completed a pilot program in which commercial and industrial businesses tracked and reported their energy use. City officials expect to present an ordinance to the City Council this fall that would require businesses to track and report their energy efficiency. They hope this will help create a market for energy efficient buildings, with tenants seeking out buildings where their utility bills will be lower.

But many tenants aren't that interested in energy-efficiency upgrades, said James Dixon, general manager at Tebo Development. Dixon said in the last 500 lease transactions he's done through Tebo, only one tenant has specifically asked for improvements related to energy efficiency.

Boulder rents are already higher than many surrounding communities, with tenants paying a premium to have a Boulder address. Making standards even more stringent might cause some businesses to reconsider, Dixon said.

"The city is very strong and has sound economics, and as we continue to hamper the private sector with different things that are brought on, if we hit any hiccups in the other factors bringing jobs here, we're going to have worse problems," Dixon said.

The energy efficiency requirements likely to be adopted this year add only 1 to 2 percent to construction costs and can be paid off in energy savings in seven to eight years, city officials said.

Boulder Community Planning and Sustainability Executive Director David Driskell said energy is only going to get more expensive as time goes on, and the economic incentive to increase energy efficiency will only become greater. Technological changes will also make it more affordable to do upgrades, he said.

"The technology exists," he said. "It's a cost issue. We're just seeing a lot of changes in the technology to support energy efficiency."

Appelbaum said the city may reassess its priorities if it moves ahead with a municipal energy utility. If the city is getting more energy from renewable sources, energy efficiency will remain important, but it also might look for other arenas to achieve more greenhouse gas reductions.

"If we get to a place where our electricity is coming from much cleaner sources, we'd still want to make buildings more energy efficient, but it would change some of the priorities and which are the key places you look to get big greenhouse gas reductions," he said. "Transportation would be the next place you would look."

Councilman Ken Wilson said he agrees the city needs to take a close look at significantly increasing its energy efficiency standards, but he fears that municipalization is distracting from the staff time needed to work on that issue. At the same time, he doesn't think a municipal utility will do much to decrease emissions statewide.

"Energy efficiency in buildings is what cities are best able to do," he said. "Changes in the mix of generation of electricity have to be done at a larger, regional level."

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